My husband took out $40k in student loans in the early 90s. He paid for a couple years and the loan was transferred. Over the past ten years the loan has been serviced by five different lenders.
He lost his job and was having trouble making payments so he asked for a deferral. Before it was granted he had two months of late payments. I just ran his reports and that one $40k student loan is showing negative marks from all five vendors. Is there anything that can be done about this?
Not if it's accurate. Student loans must report (a requirement of the higher education act).
If you're going through troubling financial times, it's always good to note that student loans can be deferred by enrolling at least half-time in a community college (and there are community colleges that have sufficient online courses that there's no logistics challenges to enrollment).
Defaulted student loans can be rehabilitated. If you make 12 monthly payments on time, the loan is sold to another lender and the default is taken off your credit report. If you google "student loan rehabilitation" you can get the information you need.
Never mind the troll. There's obviously no financial savvy behind that comment. Even people who don't need student loans can benefit greatly from them. This was especially true when rates were incredibly low (mine are being paid back at 3.1%, so believe me I'm in no hurry). Especially in a credit forum, that makes no sense. Just think about it: it's one of the best ways for young people to establish credit as well.
No argument there, but anyone who isn't careful will have all kinds of opportunties to screw it up. Credit opportunities are far more widely available now than they were when I graduated about 10 years ago.
But think about the benefits, simply from a credit standpoint. Acceptance is essentially guaranteed by law, and having a term of potentially 10+ years is great for average age of accounts. If the young person has any difficulty, deferments and the like are available to give the borrower a chance to catch up without taking a credit rating hit. And that's just for starters.
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